The rise of China's DeepSeek and its alleged use of OpenAI's models have created ripples, but economist Nouriel Roubini warns that inflationary risks and economic volatility could overshadow its impact.
What Happened: Speaking with Yahoo Finance on Wednesday, Roubini—nicknamed “Dr. Doom” for accurately forecasting the 2008 financial crisis—said DeepSeek’s emergence is an “evolution, not a revolution.”
Roubini does not believe DeepSeek fundamentally disrupts the AI landscape. He argues that AI companies are still dependent on foundational models developed by OpenAI and Nvidia Corporation.
"Without OpenAI, DeepSeek could not even exist," Roubini said.
Before Trump's victory, Roubini saw the economy heading toward a no-landing scenario, not the expected soft landing. He noted that some Donald Trump policies—like deregulation, tax cuts, and increased fossil fuel production—could boost growth and lower inflation. However, others might have the opposite effect.
He highlighted immigration, trade, and tariffs as policies with immediate economic impact, while growth-friendly measures could take a year to show results.
Roubini’s statement came after inflation data came in on Wednesday. The Consumer Price Index rose 3% year-over-year in January, above the 2.9% forecast. Month-over-month, CPI increased 0.5% from December to January, up from 0.4% in the last report.
The current economic landscape is still vulnerable to higher inflation and rising bond yields, which could lead to a stock market correction before AI-driven growth materializes, said Roubini.
Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.
Why It Matters: Last month, OpenAI accused China's DeepSeek of using unauthorized training techniques, including knowledge distillation from its proprietary models.
Trump AI adviser David Sacks supported the claim in an interview, saying "There's substantial evidence" DeepSeek replicated OpenAI's breakthroughs.
Tech giants like Amazon, Microsoft, Alphabet, and Meta are pouring about $320 billion into AI infrastructure this year, up from $246 billion in 2024.
However, DeepSeek's cost-efficient model has rattled Wall Street, raising fears that falling AI prices could erode Big Tech's massive investments.
Check out more of Benzinga’s Consumer Tech coverage by following this link.
Photo Courtesy: Prometheus72 on Shutterstock.com
Read Next:
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
